CALGARY, ALBERTA, Nov 26, 2010 (Marketwire via COMTEX News Network) --
Bowood Energy Inc. (TSX VENTURE:BWD) ("Bowood" or the "Company") announces its financial and operational results for the three months ended September 30, 2010 and financial and operational highlights subsequent to quarter end.
The Company will file its unaudited Financial Statements and related Management Discussion and Analysis ("MD & A") for the three months ended September 30, 2010 with the Canadian securities regulatory authorities on SEDAR. An electronic copy of these materials will be available under Bowood's issuer profile on SEDAR at www.sedar.com and on the Company's website at www.bowoodenergy.ca.
FINANCIAL AND OPERATING HIGHLIGHTS
On Oct 25th, 2010, subsequent to the end of the third quarter, Bowood closed its previously released 22.0 MM$ financing and the acquisition of 94.75 contiguous sections of highly prospective Alberta Bakken lands with the Blood First Nations. Additionally, the Company focused on continued acquisition of other freehold lands which are also highly prospective. With the closing of the financing, Bowood has been able to continue with its greater Armada development early in the fourth quarter, while reducing the net debt to approximately $500,000. With a strong balance sheet, a material land position in the emerging Alberta Bakken oil resource fairway and excellent results from third quarter development at Armada, the Company is well positioned for continued growth.
Certain selected financial and operational information for the three months ended September 30, 2010 is set out below and should be read in conjunction with the Company's Financial Statements and MD & A.
Three Months Ended Nine Months Ended
Financial highlights September 30, 2010 September 30, 2010
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(all amounts in Cdn $
except common share data)
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Petroleum and natural gas
revenue 1,194,460 4,154,848
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Per share - basic 0.006 0.022
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- diluted 0.006 0.022
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Funds flow from operations 91,767 583,396
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Per share - basic 0.000 0.003
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- diluted 0.000 0.003
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Net income (1,257,490) (2,682,070)
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Per share - basic (0.007) (0.014)
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- diluted (0.007) (0.014)
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Capital expenditures 2,925,886 5,165,094
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Net debt (excluding fixed
commodity contracts) 5,767,557 5,767,557
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Shareholders' equity 22,520,549 22,520,549
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Total assets 36,381,393 36,381,393
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Common share data:
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Weighted average basic 186,268,699 186,245,278
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Weighted average diluted 186,289,659 186,304,108
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Issued and outstanding 186,283,373 186,283,373
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Three Months Ended Nine Months Ended
Operating Highlights September 30, 2010 September 30, 2010
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(6:1 boe conversion)
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Average daily production
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Natural gas (mcf/d) 2,779 3,027
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Liquids (Oil & NGLs)
(bbls/d) 49 38
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Oil equivalent (boe/d) 512 543
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Production (boe/d) per
million shares 3 3
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Average sales price
(including fixed
commodity contracts):
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Natural gas ($/mcf) 5.28 4.88
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Liquids (Oil & NGLs)
($/bbl) 64.55 66.61
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Oil equivalent ($/boe) 34.83 31.92
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Operating cost ($/boe) 14.47 13.68
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Operating netback ($/boe)
(including fixed 16.76 15.51
commodity contracts)
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Wells drilled - gross
(net):
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Gas - 2 (0.80)
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Oil 3 (1.95) 4 (2.55)
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Suspended - -
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D & A - -
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Total 3 (1.95) 6 (3.35)
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1. Funds flow from operations and Operating Netbacks as presented do not
have any standardized meaning under Canadian GAAP. Please refer to the
Non-GAAP Measures section of the MD & A for more details.
OPERATIONAL UPDATE
Production of 512 boe/d for the period is down slightly from the second quarter (528 boe/d). Bowood has a high deliverability natural gas well in the Chinook area which is in competitive drainage and as a result has dropped off considerably. The well produced approximately 200 boe/d net to the Company in the second quarter and produced less than 50 boe/d in the third quarter. Despite this loss of production Bowood has held its production more or less constant from second quarter to third quarter. The production additions which offset the loss of natural gas production at Chinook, have been added in the in the greater Armada area of southern Alberta.
Bowood has delayed some of its capital expenditures associated with natural gas exploration and development, and has chosen instead to focus capital in continuing to acquire land and seismic in the Southern Alberta Bakken fairway. As a result of this redeployment of capital resources, Bowood has materially increased its southern Alberta land position but has reduced its expected 2010 exit production estimate to 675 boe/d. However most of the company's second half of 2010 capital has targeted oil prospects, which will result in the production mix being approximately 30 % oil, and 70 % gas, a significant change from the first half of 2010 (approximately 95% natural gas).
During the third quarter of 2010, Bowood drilled 3 wells (1.95 net) wells in the greater Armada area of southern Alberta, all of which have subsequently been completed. The three wells are currently being tied in and are anticipated to be on production in December. Two of the wells were completed for oil and the third has been completed for gas. Bowood is very encouraged by the success in the five well drilling program at Armada in 2010 and anticipates further follow up development in this area in 2011.
Prior to the 2010 year end, the Company plans to drill an additional two (2 net) wells, to be located in the Majorville and Enchant areas of southern Alberta. Both wells will have Mannville targets.
In addition to its drilling activities, during the third quarter Bowood completed a number of strategic land acquisitions and farmin arrangements in the greater Armada area. The Company now holds 23,707 net acres in the Armada area and Bowood's total land holdings consist of 166,000 net acres, of which 130,000 are undeveloped.
ALBERTA BAKKEN
During the third quarter of 2010, Bowood continued to strategically add to its land position in the southern Alberta Bakken play. Of most significance, the Company entered into a leasing arrangement (previously announced) with the Blood Tribe First Nation ("Blood Tribe") to acquire an interest in 94.75 sections (60,640 net acres) of lands located on the Blood Tribe Reserve in southern Alberta. This transaction closed subsequent to the end of the third quarter and Bowood now holds a total of 184 sections (117,800 net acres) of petroleum and natural gas rights on trend and highly prospective within the emerging Alberta Bakken oil resource play.
Industry activity on the Alberta Bakken play in Canada has recently increased as over 8 wells have been licensed and a number these have commenced drilling operations. In order to evaluate the potential of this oil resource play, Bowood anticipates it will drill a minimum of 2 horizontal Bakken oil wells in 2011.
About Bowood Energy Inc.